In spite of our good efforts to find the best car loan deal in the market, we fail in achieving at times. If you have realised that your current car loan is not as great as others. It is better late than never, consider going for car loan transfer. Many banks today are offering this benefit to the borrower to benefit more from the car purchase. Whether you want to change the terms of a car loan with the change in the income levels or want to reduce the current rate of interest on the loan, auto loan transfer can be considered as a good option. You can actually take a stock all your EMIs and dues on a car loan and draft a plan to repay the loan according to your current financial position with the help of the car loan transfer.
How does it work?
It is something similar to credit card balance transfer. When you hear that the new lender is offering the loan at reduced interest rates or at a terms that are favourable to you, approach the new lender requesting the car loan transfer, the process will be initiated and new lender will pay off the loan amount to the old lender and you will resume making payments to the new lenders with new rate of interest and terms and conditions. This car loan transfer will enable you to repay the loan faster because your EMI is reduced. However, everything happens for a fee.
How to get your best bet?
Research is the key factor that helps you get the best bet on the car loan. While conducting research keep in mind to check if you will be able to transfer your car loan from the current bank to the bank that you have zero in. As this service is not available free, you should do cost-benefit analysis by comparing the rate of interest and other related fees.
You should always negotiate with the new lender about the interest rates and another related fee when you are transferring car loan to the current lender. You should always calculate the cost of the loan and the benefit you gain from transferring it to the new bank before taking a final call.
You will be able to get a right picture on the car loan transfer if you take some time to calculate EMI on the loan. This gives you a transparent picture about the place it will have in the monthly budget. Make sure this new car EMI is easing your finances when compared to the old one before you transfer car loan.
How is the process carried on
The new lender will transfer the outstanding balance on the car loan to your account and you will be able to clear the debt with the old lender so, you should have all the details regarding whom the amount transfer should be made. The new lender will take the responsibility of coordinating with the old lender and clearing your outstanding balance.